STRATEGIC MANAGEMENT

Course Information: 2nd Week/Managing the Strategy

Process
Instructor's Name: DR. A. MERVE URFA YILMAZ
E-mail: [email protected]
[email protected]

isletme_ytu yildizisletme https://isl.yildiz.edu.tr

Outline

Managing the Strategy Process

1 Strategic Leadership: What Do Strategic Leaders Do?

2 Stages of Strategic Management

3 Strategic Management Approaches

4 Vision, Mission and Values

Strateg c Leadersh p

How do strategic leaders guide their companies to gain and

sustain a competitive advantage?
How do they make strategic decisions?
How do they formulate and implement their companies’
strategies?

Strategic leadership refers to executives’ use of power and

influence to direct the activities of others when pursuing an
organization’s goals.
WHAT DO STRATEGIC LEADERS DO?

Set the Vision and Mission

Make Key Decisions

Allocate Resources

Build and Maintain Culture

Respond to Opportunities and Threats

Inspire and Motivate

Engage with Stakeholders

Drive Innovation and Change

Stages of Strateg c Management
Stages of Strateg c Management

1. Strategy Formulation:

developing a vision and mission

identifying an organization’s external opportunities and threats
determining internal strengths and weaknesses
establishing long-term objectives
generating alternative strategies
choosing particular strategies to pursue
Stages of Strateg c Management

Strategy Formulation Decisions

What new businesses to enter?

What businesses to abandon?
Whether to expand operations or diversify?
Whether to enter international markets?
Whether to merge or form a joint venture?
How to avoid a hostile takeover?
Stages of Strateg c Management

2. Strategy Implementation :

requires a firm to establish annual objectives, devise policies,

motivate employees, and allocate resources so that formulated
strategies can be executed
often called the “action stage”
Stages of Strateg c Management

3. Strategy Evaluation:

Determining which strategies are not working well

Three fundamental activities:
reviewing external and internal factors that are the bases for
current strategies
measuring performance
taking corrective actions
Comprehens ve Strateg c Management
Model
The Strateg c Management Approaches

When setting the strategy process, strategic leaders

rely on three approaches:

1. Strategic planning

2. Scenario planning

3. Strategy as planned emergence

The Strateg c Management Approaches

1. Strategic Planning:

Top-down strategic planning, derived from

military strategy, is a rational process
through which executives attempt to
program future success.In this approach, all
strategic intelligence and decision-making
responsibilities are concentrated in the office
of the CEO. Much like a military general, the Evaluation
CEO leads the company strategically
through competitive battles.
The Strateg c Management Approaches

2. Scenario Planning:

Strategy planning activity in which top

management envisions different what-if
scenarios to anticipate plausible futures in
order to derive strategic responses.
The Strateg c Management Approaches
Black Swan Events: Incidents that describe highly
improbable but high-impact events.

Some examples of black swan events are:

The 9/11 terrorist attacks
Brexit (when the UK left the European Union)
The European refugee crises (in 2015 after the
Syrian war and in 2022 after Russia's invasion of
Ukraine)
The COVID-19 pandemic
The Strateg c Management Approaches
3. Strategy as Planned Emergence-Top
Down and Bottom Up:

Strategy process in which organizational

structure and systems allow bottom฀up
strategic initiatives to emerge and be
evaluated and coordinated by top
management.
Strategic initiatives can bubble up from
deep within the organization through
autonomous actions, serendipity, and
resource allocation process.
The Strateg c Management Approaches

Intended strategy: The outcome of a

rational and structured top฀down strategic
plan.

Realized strategy: Combination of

intended and emergent strategy.

Emergent strategy: Any unplanned

strategic initiative bubbling up from the
bottom of the organization.
The Strateg c Management Approaches

Strategic initiative: Any activity a firm pursues to explore and

develop new products and processes, new markets, or new
ventures.

Strategic initiatives can bubble up from deep within a firm

through:
Autonomous actions
Serendipity
The resource-allocation process
The Strateg c Management Approaches
Autonomous actions: Strategic initiatives undertaken by
lower-level employees on their own volition and often in
response to unexpected situations.

Serendipity: Any random events, pleasant surprises, and

accidental happenstances that can have a profound impact on
a firm’s strategic initiatives.

The resource-allocation process: The way a firm allocates

its resources based on predetermined policies, which can be
critical in shaping its realized strategy.
V s on, M ss on and Values

Vision-What is our purpose? What do we want to accomplish ultimately?

Mission-How do we accomplish our goals?
Values-What commitments do we make, and what rules do we follow, to act
legally and ethically while working towards our goals?
V s on: What Do We Want to
Become?

Vision: A statement that captures an organization’s purpose and aspiration. It

spells out what the organization ultimately wants to accomplish.

A clear vision provides the foundation for developing a comprehensive mission

statement.

The vision statement should be short, ideally one sentence, and many managers
should help create it.
V s on: What Do We Want to
Become?
Effective vision statements exhibit the following five characteristics:

1. Clear: reveals type of industry and what firm strives to become

2. Futuristic: reveals what the firm strives to become or accomplish within five
years
3. Concise: one sentence in length
4. Unique: reveals the firm’s competitive advantage
5. Inspiring: motivates the readers to support the firm
V s on: What Do We Want to
Become?

There are 2 types of vission statements:

1) Product-Oriented Vision Statements focus on what a company sells rather

than customer needs.

2) Customer-Oriented Vision Statements focus on solving customer needs

rather than just selling a product.
M ss on: What Is Our Bus ness?

Mission statement, is a declaration of an organization’s “reason for being”.

Description of what an organization actually does—the products and services it plans

to provide, and the markets in which it will compete.
M ss on: What Is Our Bus ness?
Characteristics of a Mission Statement:

1. Broad in scope; does not include monetary amounts, numbers, percentages,

ratios, or objectives
2. Concise; fewer than one hundred words in length
3. Inspiring
4. Identifies the utility of a firm’s products
5. Reveals that the firm is socially responsible
6. Reveals that the firm is environmentally responsible
7. Includes nine components: customers, products or services, markets,
technology, concern for survival/growth/profits, philosophy, distinctive
competence, concern for public image, concern for employees
8. Reconciliatory; resolves divergent views among stakeholders
9. Enduring but never cast in stone
10. Attracts customers; is written from a customer perspective
M ss on: What Is Our Bus ness?

A mission statement should:

(1) define what the organization is,

(2) be limited enough to exclude some ventures and broad enough to
allow for creative growth,
(3) distinguish a given organization from all others,
(4) serve as a framework for evaluating both current and prospective
activities, and
(5) be stated in terms sufficiently clear to be widely understood
throughout the organization.
M ss on: What Is Our Bus ness?
Benefits of Having a Clear Vision and Mission

1. Achieve clarity of purpose among all managers and employees.

2. Provide a basis for all other strategic planning activities, including internal and
external assessment, establishing objectives, developing strategies, choosing
among alternative strategies, devising policies, establishing organizational
structure, allocating resources, and evaluating performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.
 Values: How do we accompl sh our goals?

Core Values Statement: Statement of principles to guide an

organization as it works to achieve its vision and fulfill its mission, for
both internal conduct and external interactions; it often includes
explicit ethical considerations.
 References

Rothaermel, F. T. (2024). Strategic management. McGraw-Hill.

David, F. R. (2023). Strategic management concepts and cases.
Prentice hall.
Peng, M. W. (2022). Global strategy. Cengage learning.
Ülgen, H., Mirze, K. (2016). İşletmelerde Stratejik Yönetim. İstanbul:
Beta.